A number of our clients do business in Canada. It is one of the world's top trading economies, despite its relatively small population. Canada is a major exporter of commodities and food, and boasts expansive oil reserves. The country has strong trade links with the US and is increasing its trade with Asia. Our coverage – using our unique Total Analysis model – ensures that our clients make sound investment decisions in Canada. Our teams keep our clients informed of the latest market moves and political developments as part of our 'top-down' and 'bottom-up' perspective. We also provide in-depth analysis on 23 of Canada's most important industries. Combining interactive data and forecasting with our risk-assessed and results-proven analysis gives our clients the big picture they need. We are confident that you, as our client, will find doing business in Canada is made easy.

Country Risk

Canada Country Risk

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Core Views

The sharp drop in oil prices will prolong Canada's economic rebalancing, by weighing on fixed investment growth over the few years.

The current account deficit will narrow as strong US demand and a weaker exchange rate boost non-commodity exports in the coming years.

The 2015 general federal election will be a very close one, after the Conservatives have succeeded in halting their slide in opinion polls.

Key Forecast Changes

We have lower our real GDP growth forecast for Canada to 2.1% in 2015, down from 2.3% and see slightly lower growth in 2016 (2.3% versus 2.4% previously).

We have changed our current account deficit forecast for 2015 to 1.5% of GDP from 2.2% as robust US demand for crude oil has...

Canada Industry Coverage (19)

Agribusiness

Canada Agribusiness

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BMI View: We believe that Canada will experience another year-on-year decline in grains production in 2015/16, as lower average prices and high stocks will limit incentives for farmers.The country's poultry industry is well placed to post strong growth in 2015 and beyond, while we believe that the Canadian beef and pork industries will gain the most from having signed the EU-Canada Free Trade Agreement in October 2013

Autos

Canada Autos

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Sustained lower oil prices, and the likelihood of more to come, given OPEC's decision not to cut oil output, has exacerbated the outperformance of the Canadian light truck segment in the latter months of 2014. This also means our more optimistic scenario for the passenger car segment to achieve positive growth in 2014 is looking unachievable, following a 4.2% year-on-year (y-o-y) decline in November. While we expect the segment to post positive growth in 2015, this will be marginal and indeed our average annual growth forecast of 1% for the segment to 2018 means it will stay well below its 2008 levels of over 800,000 units.

In line with our expectations, light trucks continue their outperformance of the total light vehicle market, but even more so than expected as the promise of lower fuel prices drives sales. Segment sales for November were up 9.4% y-o-y and 10.3% in 11M14, which has prompted a slight upgrade to our light truck forecast to...

Canada Commercial Banking

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Defence & Security

Canada Defence & Security

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BMI View:Canadian defence spending has been steadily increasing as the country has sought to address concerns over maritime sovereignty and the protection of natural resources. However, cost saving measures are being considered and in some cases implemented so that the long term goals are met.The reduction in short term defence spendingcould causedelaysforcertainmuch-neededprocurementsto bring the country in line with its NATO peers' spending in anticipation of deployments to counter ISIS movements.

Current plans are to upgrade, enhance and to extend the life of their current military technology. The CF...

Food & Drink

Canada Food & Drink

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BMI View: The key theme for Canada's economy over the coming years will remain 'rebalancing', as private consumption and high oil prices can no longer be relied upon to provide robust economic growth. High household debt levels will require a period of prolonged deleveraging. Tighter regulation and macro-prudential measures introduced in 2012 to engineer a soft landing of the housing market are likely to restrict households from taking on more debt and weigh on spending growth over the coming years. We forecast average real private consumption growth of 2.2% between 2014 and 2018.

Freight Transport

Canada Freight Transport

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BMI View: We envisage fairly muted growthforCanadian freight in 2015 as lower oil prices are expected to curtail export growth over the coming 12 months. However, manufactured goods exports will increasingly pick up the slack, ensuring a secular decline of the current account shortfall and, by extension, providing some positivity for Canada&#39;s freight industry.

The key theme for Canada&#39;s economy over the coming years will remain &#39;rebalancing&#39;, as private consumption and high oil prices can no longer be relied upon to provide robust economic growth. This uneasy bedrock will mean that we do not expect to see anything spectacular coming from the Canadian freight industry in the short- to- medium term, although growth will remain positive throughout the sector.

Information Technology

Canada Information Technology

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BMI View: As a mature market Canadian IT sectorgrowth rates will significantly underperform emerging markets. Despite the fact that PC hardware prices have declined, Canada will continue to be one of the most lucrative markets globally in terms of spending per capita. We expect Canada's IT market to record growth of4.2% in 2015, and forecast aCAGR of 4.1% 2014-2018. Premium consumer hardware will remain a growth area, but over the medium term the areas we identify for outperformance include enterprise adoption of cloud computing, real-time software and services and big data analytics.

Infrastructure

Canada Infrastructure

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BMI View: In light of a reduction intheoil sector investment, we have revised downwards our forecasts for short-term growth in Canada&#39;s construction sector, with industry growth of just 1.6% expected in 2015. Although this is an improvement on 2014, when the construction sector saw limited growth of 0.5%, the outlook for infrastructure investment remains subdued. It is worth noting, however, that the project pipeline remains considerable, particularly as the New Building Canada Plan begins to gather pace.

Key Forecasts and Developments Include:

One of the first major plans announced under the New Building Canada Plan in the transport sector is the CAD43.7bn investment in the expansion of the Port of Montreal.

Insurance

Canada Insurance

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BMI View: With the results of our latest analysis of the Canadian insurance sector over the 2015-2019 forecast period, we confirm the ongoing overall growth of gross premiums in both the life and non-life segments.The country's insurance sector is one of the most sophisticated and will remain highly competitive in the following years. In recent months, we have seen several major mergers and acquisitions within both segments. In the non-life segment specifically, we foresee that it is likely for further consolidation to occur.

The Canadian insurance sector has been one of the strongest and most sophisticated among all countries which are monitored by BMI. Both in the country's life and non-life segments, the leading players are world class, as they continuously seek innovative ways to serve their customers in a market...

Medical Devices

Canada Medical Devices

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BMI Industry View :Canada has a sophisticated andwell establishedmedical device market which ranks ninth in the world in terms of value.The market isexpected to grow at a CAGR of 4.0% over the 2013-2018 period. This steady growthshouldsee the balance oftrade deficit widenowing toCanada&#39;sreliance upon imports.

Headline Industry Forecasts

Canada&#39;s medical device market ranks as the ninth largest in the world. In 2013, the medical device market was estimated at US$6.8bn, equal to US$195 per capita. The...

Metals

Canada Metals

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BMI View: Canadian metal production will be driven by increasing importdemandinboth the US and Mexico to2018. Increasing manufacturing and industrial activity inthe latter twocountries should help drive demand for metal inputs.Moreover, a weaker Canadian dollar against the US dollar shouldhelp supportCanadianexports.

Accelerating economic expansion in the US and Mexico in 2015, combined with a weaker Canadian dollar (CAD) in the coming quarters, will support growth in the Canadian metals sector to 2018. Indeed, we expect both the US and Mexico will experience positive trends in...

Mining

Canada Mining

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BMI View: Canadawill remain one of the largest players in the global mining industry. Itsdiversified mineral base andwell-developed capital marketswillenable it to remaina top source of metals and financing, respectively.Indeed, thecountrywillremain atop-tenglobal producer of zinc, lead, iron ore, nickel, copper, gold, silver, uranium andpotashover the next five years.

Canada's mining sector advantages will continue in the coming years, enabling solid, if modest, industry growth to 2019. Moreover, Canada's political leadership is likely to maintain...

Oil & Gas

Canada Oil & Gas

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BMI View: Our growth outlook for Canada's oil and gas industry has grown increasingly modest given mounting headwinds in both the upstream and midstream sectors amid lower oil prices. The greatest threats to these projects are the challenging project economics and regulatory headwinds that could hamper the growth of oil sands-driven production and LNG terminal development,weighing on total hydrocarbon output. This is exacerbated by the likely drop in exploratory activity throughout Canadian acreage as companies revise capital expenditures in the coming years, with reserves likely to suffer as a result.

Petrochemicals

Canada Petrochemicals

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The drive to diversify feedstock is the main focus of the Canadian petrochemicals sector as it seeks to meet the challenge posed by new shale-based capacity in the US. BMI's latest Canada Petrochemicals Report anticipates continued growth in output in the short term, but that market diversification will be crucial to the industry's long-term success.

Over the near term, the focus for the industry will be on Nova Chemicals' plans to expand ethylene and polyethylene (PE) capacity as part of its 'Nova 2020' growth strategy, which is making extensive use of exploiting unconventional gas deposits in North America. Nova is engaged in efforts to increase supply for its crackers in Corunna, Ontario and Joffre, Alberta. Meanwhile, the company is expanding PE production capacity with 430,000-500,000 tonnes per annum (tpa) of linear low-density PE due to come on stream in 2016 and the potential for a...

Pharmaceuticals & Healthcare

Canada Pharmaceuticals & Healthcare

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BMI View: Supported by strong democratic institutions and a long historyofstable political Leadership, Canada is home to the second largest pharmaceutical market in the Americas and one of the largest in world.We believe thatdrugmakers will continueto realise considerablerewards,as sales of patented pharmaceuticals settle into a trend of steadygrowth, which isonly nominallyaffectedbytheparticularlyslowpenetrationof generics....

Power

Canada Power

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BMI View : We maintain our moderately positive outlook for Canada's power sector, which we expect to remainmoreattractive relative to other mature markets in North America and Western Europe(NAWE)over the coming decade.Our view is premised on Canada's stable electricity consumption figures androbusthydropower project pipeline, coupled withstrong growth in natural gas-fired generation. Consequently, themain risk to our power generation forecasts is represented by lower gas production expectations due to falling oil prices, which could create feedstock supply bottlenecks for Canada's...

Renewables

Canada Renewables

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BMI View : On paper, Canada is an excellent candidate for non-hydro renewable development; with vast wind resources, plenty of land to construct wind farms, a national commitment to rid itself of coal fired electrical generation and a safe investment climate. However the country's huge hydro electrical capacities, and truncated constitutional arrangements which leave emissions targets with the federal government and precise energy mix policies with provincial jurisdictions, has created a patchwork quilt of markets and policies across the country. Add to that mix the national reliance on oil and gas as a major source of its wealth and renewables are destined to play a minor role in the Canadian energy story.

Canada does provide opportunities, especially in the emerging in-stream tidal sector and wind, but is a laggard in adopting other renewable technologies at scale....

Shipping

Canada Shipping

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BMI View: The country's two largest ports - Port Metro Vancouver and thePort of Montreal - are both set to see healthy growth interms ofboth the tonnage and container spheres, echoing the positive growth expected to occur in the wider Canadian economy. Indeed, total trade growth, buoyed by exports, will return to the positive in 2015following two years of contractions.

Based purely on year-on-year (y-o-y) growth, rather than tonnage handled, the outperforming Canadian port is set to be the Port of Prince Rupert, which is pencilled in to see y-o-y gains of just over 12% in 2015. The Port of Montreal is poised to come in first place in terms of annual tonnage growth (4.83%).

Telecommunications

Canada Telecommunications

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BMI View: The exit of VimpelCom represents a bearish signal for the mobile market, which has been unable to support new entrants to challenge the established three operators.The regulator has also blocked attempts by Rogers , Bell Wireless and Telus t o acquire the smaller players in the market such as Wind and Mobilicity , resulting in the new entrants struggling to remain afloat. It's unclear what strategy the new owners take but it could become a market consolidator and a tie up with Videotron would be mutually beneficial and...

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